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TMI Blog2012 (6) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial question of law: Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the properties at Worli, Mumbai owned by the assessee was outside the purview of the 'asset' because this property was commercial property, ignoring the fact that sub-clauses (4) and (5) of the clause (i) of Section 2(ea) were brought on the statute only with effect from 01.04.1999 through the Finance (No. 2) Act, 1999? 3. The respondent-assessee filed return of wealth tax for assessment year 1998-99 on 30.10.1998 showing net wealth of ₹ 3,31,00,500/-. In the wealth tax return the value of two properties, that is, office premises at Worli, Mumbai and bunglow at Versova Beach was sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the Tribunal, which held that as the income earned by the assessee from the said property is assessable under the head income from house property the same is not a non-productive commercial asset, and, therefore, the value of such asset cannot be assessed under the Wealth Tax Act. 4. Assailing the impugned order, Mr. M. R. Bhatt, learned senior advocate appearing on behalf of the appellantrevenue drew the attention of the court to the provisions of clause (i) of section 2(ea) of the Act as it stood prior to its amendment by the Finance (No.2) Act, 1996 with effect from 1.4.1997 as well as after the amendment to submit that the Tribunal has failed to consider the position prevailing prior to 1.4.1997 and subsequent thereto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties are exempted under section 2(ea)(i)(5) of the Act. 6. For the purpose of understanding the controversy involved in the present case it would be necessary to refer to section 2(ea) as it stood prior to 1.4.1997 and after its amendment with effect from 1.4.1997 by the Finance (No.2) Act, 1996 which read thus: Prior to 1.4.1997 (ea) assets in relation to the assessment year commencing on the 1 st day of April, 1993, or any subsequent assessment year, means- (I) any guest house and any residential house including a farm house situated within twenty-five kilometres from the local limits of any municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at any land or building used for commercial purposes was not included within the ambit of the expression assets as defined thereunder, and as such, the property of the nature involved in the present case did not fall within the scope and ambit of the expression assets prior to 01.04.1997. However, with effect from 01.04.1997, the definition of assets has been amended and the words commercial purposes have been specifically inserted therein. The following portion of the Departmental Circular No.762, dated 18th February, 1998 elaborates the scope and effect of the substitution of section 2(ea)(i) by the Finance (No.2) Act, 1996, as under: Amendment of the term assets .- 57.1 The term assets , on which tax is to be levied is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which forms part of stock-in-trade; (3) any house which the assessee may occupy for the purposes of any business or profession carried on by him; 9. Examining the facts of the present case in the light of the aforesaid provision, the subject property undoubtedly does not fall within any of the aforesaid three categories which are excluded from the purview of the section 2(ea) of the Act. Moreover, it may be noticed that even before the Commissioner (Appeals) it was not the case of the assessee that it fell within the ambit of any of the aforesaid three excepted categories. According to the assessee the subject property was exempted under clause 2(ea)(i)(5) of the Act. In this regard it may be germane to note that by the Finance (No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealth of the assessee. The Tribunal was, therefore, not justified in holding that the subject property owned by the assessee was outside the purview of the expression assets as defined under section 2(ea)(i) of the Act. The question, therefore, stands answered in the negative, that is, in favour of the revenue and against the assessee. 11. It is, however, clarified that this court has not expressed any opinion one way or the other, as regards the applicability or otherwise of sub-clause (5) of clause (i) of section 2(ea) of the Act in respect of the subject property, as the same does not arise for consideration in the present case. 12. At this stage, Mr. Bhargav Karia, learned advocate for the respondent has submitted that in light ..... X X X X Extracts X X X X X X X X Extracts X X X X
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